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A health insurance policy has a coinsurance clause that requires the insured to pay the first...

A health insurance policy has a coinsurance clause that requires the insured to pay the first $250 of charges and 20 percent of additional charges up to a maximum total payment of $1,250. The bills for health care are
January 5. $120.      March 30.           $45
April 18.     $375.      June. 20.             $63
August 25. $560.      October 2.           $190
November 1 $35.      December 20.     $95
Calculate the amount the insured must pay for each of the bills. Then determine the total amount of the health care costs and the percentage paid by the insured and by the insurer.

Expert Solution

Answer to Part (1):

As given in the question:the insured will have to pay the first $250 of the charges and 20% of additional charges up to a maximum of total payments of $1250.

As given in the question:

For January 18: the Health care bill is $120 which is below $250 and hence the insured will have to pay the entire $120.

For March 30: the Health care bill is $45 which is below $250 and hence the insured will have to pay the entire $45.

For April 18: the Health care bill is $375 which is greater than $250 and hence the insured will have to pay : $250 +.20*(375-250)ie. $ 275( the insured has to pay 20% of the additional charges exceeding $250)

For June 20: the Health care bill is $63 which is below $250 and hence the insured will have to pay the entire $63.
For August 25: the Health care bill is $560 which is greater than $250 and hence the insured will have to pay : $250 +.20*(560-250)ie. $ 312( the insured has to pay 20% of the additional charges exceeding $250)

For October 2: the Health care bill is $190 which is below $250 and hence the insured will have to pay the entire $190.

For November 1: the Health care bill is $35 which is below $250 and hence the insured will have to pay the entire $35.

For December 20: the Health care bill is $95 which is below $250 and hence the insured will have to pay the entire $95

Answer to Part (2)

Total Healthcare Costs= $120+$45+$375+$63+$560+$190+$35+$95 ie. $ 1483

Total Amount of Healthcare costs paid by the insured= $120+$45+$ 275+$ 63+$ 312+$190+$35+$95 ie. $ 1135

So , the total amount paid by the insurer= Total Healthcare Costs-Total Amount of Healthcare costs paid by the insured ie. $1483-$1135 ie. $ 348

Percentage of the amount of healthcare costs paid by the insured=(Total Amount of Healthcare costs paid by the insured/Total Healthcare costs)*100 ie. ($ 1135/$ 1483) * 100 ie 76.53%

Percentage of the amount of healthcare costs paid by the insurer=(Total Amount of Healthcare costs paid by the insurer/Total Healthcare costs)*100 ie. ($ 348/$ 1483) * 100 ie 23.47%

jeff jeffy answered 2 years ago

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